In brief
- On 14 November 2025, the English High Court ruled that BHP is liable for the collapse of the Fundão Dam in Brazil, which killed 19 people and caused widespread environmental harm.
- The case clarifies the scope of liability for parent companies whose subsidiaries have caused environmental harm in Brazil by deciding that BHP, as parent company and joint venture partner in Samarco (the dam operator), is responsible under Brazilian law for environmental damage caused by the November 2015 disaster.
- This landmark decision should act as a warning to multinational corporations operating in Brazil that they cannot hide behind subsidiaries for harms they ultimately cause and/or fail to mitigate.
- Importantly, the case also demonstrates the English courts’ capability to manage and decide large-scale international group actions, including those involving hundreds of thousands of claimants. The English courts are well-equipped to deal with complex, high-value international group action disputes.
- For third party funders, this outcome will be particularly reassuring. Group actions of this scale almost always require external funding, and the fact that such a case was successful in this jurisdiction will encourage further investment.
Background
The Fundão Dam collapse in November 2015 killed 19 people, destroyed hundreds of homes and caused widespread pollution. The failure released approximately 45 million cubic metres of tailings (the byproduct from mining and processing iron ore), with toxic waste reaching as far as the Atlantic. The cause of the collapse was "liquefaction" (i.e. saturation and sudden loss of strength) of the tailings which supported the structure of the dam.
Proceedings were brought on behalf of more than 600,000 individuals, businesses and municipalities. The claimants sought compensation in England from BHP Group (UK) Limited and BHP Group Limited (BHP). The dam was owned by Samarco, a joint venture between the Brazilian mining company, Vale and BHP. Even though the claim was issued in the English court, the claimants argued that Brazilian law should apply to the dispute as the damage occurred in Brazil; this was accepted by the court, which relied on testimony from Brazilian law experts to assist it in interpreting and applying Brazilian law.
Originally issued in late 2018, the English claims were struck out in 2020 as an abuse of process on the basis that the claim and number of claimants was too large to be able to be managed appropriately. However it was reinstated by the Court of Appeal in 2022, with the court deciding that the size of the case and number of claimants alone could not support a conclusion of abuse of process, and that the right time to assess the manageability of the claim would be at the case management conference.
The case is being heard by way of split trial: this first phase addressed liability under Brazilian law; the second phase will establish quantum and has been scheduled for October 2026. BHP has already indicated that it intends to appeal this decision on liability.
High Court decision
Mrs Justice O'Farrell handed down a 222-page judgment following a five-month trial, finding BHP liable on two principal grounds whilst rejecting a third claim. On limitation, the court rejected BHP's arguments and found that the claimants' claims were not time-barred.
Ground 1: Strict liability under Brazilian Environmental Law
The court found in favour of the claimants' interpretation of Articles 3(IV) and 14, paragraph 1, of the Brazilian Environmental Law:
- Pursuant to Article 3(IV), it concluded that BHP did fulfil the definition of a "polluter" as a person or entity who is directly or indirectly responsible for the polluting activity.
- Pursuant to Article 14, paragraph 1, it concluded that BHP was subject to strict liability for damage caused to the environment and any third parties affected by the polluter's activities.
In determining this, the court found that by reference to Brazilian case law, BHP, together with Vale, was directly and/or indirectly responsible for Samarco's activity on the following bases:
- Samarco was "controlled and operated by BHP and Vale" and they were Samarco's "directing mind".
- Via committees and subcommittees, BHP was involved in Samarco's activities "at every level" from "strategic decisions and dividend shares to detailed operational matters".
- BHP assumed responsibility for "risk assessment, control, mitigation and management within the BHP Group and specifically within Samarco".
- BHP was substantially invested in Samarco and derived substantial financial and commercial benefits.
Causation of the environmental damage by Samarco was not disputed, therefore it followed that BHP was strictly liable for the collapse of the Fundão Dam.
Ground 2: Fault-based liability under Brazilian Civil Code
The court also found BHP liable based on fault under Article 186 of the Brazilian Civil Code, because it found that BHP had assumed responsibility for "risk assessment, management and control of the tailings dam". This gave rise to BHP also assuming a legal duty to avoid or mitigate harm caused by Samarco's acts or omissions that were "negligent, imprudent or lacking in skill". Therefore, BHP was liable for the collapse of the dam, given that:
- The risk of collapse was foreseeable. BHP knew or should have known that the stability of the dam was compromised; there were obvious signs of seepage and cracking before the collapse;
- BHP failed to follow the recommendations of various reports throughout the life of the dam which could have mitigated this risk; and
- Despite issues known to affect the stability of the dam, BHP caused Samarco to continue raising the dam's height, which in her judgment, Justice O'Farell described as "inconceivable" in the circumstances.
The court concluded that these negligent failures caused the collapse and that carrying out remedial measures, if performed, could have averted it.
Ground 3: Corporate Law claim rejected
The claimants also argued that BHP was liable in its capacity as a “controlling shareholder” of Samarco by breaching its duties (under Article 116 and 117 of the Brazilian Corporate Law (Federal No. 6,404/1976) (the Corporate Law)) to (i) use its controlling power for the purpose of the controlled company’s objects and social function, and (ii) not abuse this power. Pursuant to Article 246, this would oblige BHP to compensate damage caused to third parties which could have been avoided.
The court found that whilst BHP did satisfy both limbs of the test for controlling shareholder, it was not subject to a duty under the Corporate Law to avoid and prevent damage to third parties, nor was this actionable by third parties, such as the local community.
The Judge therefore found no liability arising on the facts of this case under the Corporate Law.
Practical considerations
This landmark decision offers important guidance (or warning) for multinational corporations with operations in Brazil, and their advisers:
- Parent company liability – Parent companies are not necessarily insulated from liability for environmental damage simply by operating through subsidiaries or joint ventures where they remain instrumental in decision making, risk management and derive financial benefit from the subsidiary's operations. The broad interpretation of "polluter" under Brazilian Environmental Law encompasses those who cause harm directly as well as indirectly by way of controlling a subsidiary or by deriving benefit from polluting activities.
- Risk management obligations – Parent companies with oversight responsibilities must act on known risks; this knowledge can give rise to parent company liability.
- Jurisdiction – This case confirms that English courts will apply foreign environmental law where access to justice is limited in the jurisdiction where the damage occurred.
- Group action management – The case is a clear demonstration that the English courts are able to manage and adjudicate complex group tort actions involving hundreds of thousands of claimants, proving England and Wales as a viable forum for large-scale group action disputes.
- Third party funding – The outcome will be welcomed by funders, as it shows that these huge group actions, which almost always require third party funding, are feasible in this jurisdiction. A loss would have risked deterring future funding for any similar mass tort claims and undermining access to justice for large groups of claimants.
This decision was of course made under Brazilian law specifically, however it demonstrates the English courts’ willingness and ability to decide foreign cases and apply foreign laws, where access to justice demands it.